Nepalis facing rising edible oil prices amid pandemicThe price of essential items like cooking oil has almost doubled in recent weeks, consumer rights activists say.
Nepalis are facing the double whammy of soaring market prices and a devastating pandemic, consumer rights activists said.
The price of essential items like edible oil has almost doubled in recent weeks, even as the people are having to make do with reduced incomes as the coronavirus has destroyed jobs and businesses, consumer rights activists said.
Sunflower, soybean and mustard oils have become dearer as unscrupulous traders try to take advantage of political instability and a society living amid a tense situation with the pandemic running wild, according to insiders.
The price of sunflower oil jumped to Rs300 per litre from Rs235 within a few days, while soybean oil now costs Rs250, up from Rs210.
The price of mustard oil price went up to Rs350 per litre from Rs200 after the lockdown was announced, said retailers.
"Prices rose steeply after the government announced snap elections and shut down the markets completely as it enforced a more stringent lockdown," said Madhav Timilsina, president of the Consumer Rights Investigation Forum.
“Domestic traders are hiking prices unnaturally under the pretext of rising raw material prices,” he said.
"While the lockdown that has lasted a month shaved earnings, the price of basic essential food items is doubling," said Radha Basnet of Kupondol as she painfully paid Rs290 for a one-litre bottle of sunflower oil.
“Cooking is impossible without edible oil. It is absolutely necessary. But government activity in the market to control prices of essential food products is zero,” she said.
According to Nepal Rastra Bank, the price of ghee and oil in mid-April was 21.38 percent higher year on year.
Former commerce secretary Purushottam Ojha said that three things mainly cause an increase in the price of edible oil—a rise in the price of raw materials at source, an increase in the tariff by the government and unfair trade practices.
"The price of edible oil has increased by more than 30 percent which is too high," Ojha told the Post. “Edible oil falls under basic essential food items, and the government should regulate its distribution,” he said.
The Department of Commerce, Supplies and Consumer Protection should do a market analysis of the price hike and inform the people, he said. “The government should undertake the responsibility of controlling prices and regulate the food market by gathering data of the inventory of edible oil, both raw and refined, and analysing it."
Traders taking advantage of zero tariff have exported more than 90 percent of the refined edible oil produced in Nepal to India in the past 10 months, Ojha said. Edible oil shipments account for 35 percent of the country's total exports, but that does not have any contribution to the national economy, he added.
“If excess exports are the reason for the sharp rise in prices, then it needs to be brought under control so that the price does not rise exorbitantly,” Ojha said.
"The government should be ready for rapid action instead of issuing directives. The tariff and duties can be reduced to provide relief to consumers at a time of crisis or export quotas can be imposed to ensure sufficient supply in the domestic market," he said.
Despite adequate imports of crude soybean and sunflower oils, consumers are paying high prices to cook their vegetables.
The rise in the price of crude oil in the international market is considered to be one of the factors for the surging price of edible oil. India is also facing the highest level of edible oil price surges in over a decade.
Figures issued by the Department of Customs show that the country imported crude sunflower oil worth Rs12.15 billion in the first 10 months of the current fiscal year with exports reaching Rs1.70 billion during the same period. The country imported 103.911 million litres of crude sunflower oil during the review period.
Nepal imports most of its crude sunflower oil requirements from Ukraine, Russia and Argentina.
During the first 10 months of the current fiscal year, Nepal imported crude soybean oil worth Rs39.46 billion and exported refined soybean oil valued at Rs35.75 billion. The country imported 355.29 million litres of crude soybean oil during the review period.
Nepal bought most of its soybean oil from Argentina, Egypt, Paraguay and Ukraine.
In recent months, the export of soybean oil has been increasing as traders changed tack to keep exploiting trade preferential loopholes after the Indian government squeezed palm oil imports.
With Nepal’s soybean oil exports starting to reach sky-high levels despite near zero domestic production, the Indian government officially asked the Nepal government to check the authenticity of the certificate of origin issued to local exporters .
"As the country is going through a health crisis, people are not able to go out and are forced to pay whatever prices traders say, so the government should take the responsibility," said Ojha.
Domestic manufacturers are exporting edible oil to India to make a profit as prices have increased in the Indian market, creating shortage in the domestic market, he said.
Timilsina said that the department was staying away from the matter saying that rising international prices of raw materials had led to increased market prices in Nepal, which is wrong. "The government lacks data about imports, shipment dates, stocks and supply, consumer and factory prices and changes in prices," he said.
Apart from swelling prices, Timilsina said he had been receiving complaints about the quality and quantity of edible oil.
Prakash Poudel, director general of the department, said that they were collecting information from producers regarding the reasons behind the hike in prices.
“Based on the preliminary information we have collected, we have found that there is a huge difference between the factory price and the maximum retail price,” he said. "This might be due to a rise in raw material prices and increased mark-up."
He admitted that producers had been raising prices continuously in recent months. “We would have inspected their factories; but due to the coronavirus, we have not been able to do so,” he added.